$53,000 in Damages Against the State of Minnesota in Age Discrimination Lawsuit

 
Thursday, May 3, 2012
 

A federal judge has approved a consent decree requiring the Minnesota Board of Public Defense (BOPD) to make restitution to settle an EEOC age discrimination lawsuit.

The BOPD must pay $53,000 to four former employees who were denied employer contributions for retiree health and dental insurance because they were older than age 55 at the time that they retired.  The BOPD must also offer to pay future premium costs for one of the employees who would still be entitled to receive them but for the unlawful early retirement provision.

This decree, entered by federal Judge Richard Kyle, resolves the last in a series of cases brought by the EEOC against Minnesota state agencies regarding early retirement incentive plans contained in collective bargaining agreements for certain employees.  The incentive plans provided that the employee had to retire by age 55 to obtain the incentive, and would lose it if he or she worked longer.

For an employee who did retire by age 55, the employer continued to pay the employer’s share of the insurance premiums which generally ranged from 85% to 100% of the total amount of the premium—and continued to do so until the retiree reached age 65.  For an employee who retired after age 55, the employer paid nothing, and the cost of retiree insurance fell entirely on the retired employee.

Thus, explained EEOC Senior Trial Attorney Laurie Vasichek, who led the litigation team on the cases, “Not retiring by age 55 was like stepping off a cliff as far retiree medical insurance was concerned, and the parties to the collective bargaining agreements referred to this provision as the ‘Age 55 Cliff.?”

The EEOC contended that the “Age 55 Cliff” was unlawful age discrimination.  Courts agreed, with the U.S. Eighth Circuit Court of Appeals affirming a judgment by U.S. District Court Judge Paul A. Magnuson, which held that the early retirement incentives were arbitrary age discrimination.

The settlement with the BOPD is believed to resolve the final case in which the “Age 55 Cliff” was challenged.  The EEOC brought cases against six different state agencies in all.  In total, the EEOC obtained, through court judgments and consent decrees, just under $2 million in lost premium contributions, which were distributed to approximately 85 people.  The state also paid the employers’ share of health and dental insurance to those claimants who were eligible for it but for their age.

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